Energy

The planned pipeline to deliver natural gas from Sichuan to eastern China will start construction next month according to Sinopec. The 1,702-km-long pipeline estimated to cost 65.7 billion yuan with a designed annual transport capacity of 12 billion cubic meters will be completed by 2010. Originally the pipeline was designed to supply natural gas to Shandong Province. However, as more reserves were proven to exist in Sichuan's Puguang Gasfield, construction of the pipeline was redesigned and it is now expected to supply gas to both Shandong Province and other regions, mainly the Yangtze River Delta area. With several sub-pipelines, the Sichuan-eastern China pipeline is designed to eventually supply gas to Sichuan, Hubei, Jiangxi, Anhui, Jiangsu, and Zhejiang provinces and Chongqing and Shanghai municipalities.

The Chinese mainland's second petroleum exchange started trading on Wednesday in Dalian. The Dalian Petroleum Exchange would mainly deal with spot transactions of fuel oil, bitumen, and petrochemical products and would build itself into a trading, pricing, and information center. The exchange's annual trading volume would exceed 10 billion yuan (1.3 billion US dollars). The Shanghai Petroleum Exchange, the first exchange for the trade of oil products on the Chinese mainland, opened on August 18 last year.

China National Offshore Oil Corporation (CNOOC) is strengthening its foothold in downstream businesses by planning several gigantic heavy oil petrochemical projects in Guangdong Province. These include a three-million-ton asphaltum project and a 600,000-ton lubricant plant in Zhanjiang of Guangdong Province.

China's power generation industry used more than 590.78 million tons of coal in the first half of this year, up nearly 18 percent year-on-year, according to the China Electricity Council (CEC). According to CEC statistics, the nation's power plants with more than 6,000 kilowatt in capacity used 356 grams of coal per kilowatt-hour, eight grams lower than during the same period last year.

China's consumption of apparent crude oil and refined oil products hit a record high in the first half of the year, totaling 173.03 million tons and 106.112 million tons respectively, up 6.8 percent and 9.6 percent on the previous year. According to the National Bureau of Statistics (NBS), the "apparent consumption" represents the sum of net imports and output but excludes inventory.

China National Petroleum Corporation (CNPC) will further enhance its cooperation with the Canadian petroleum sector, a spokesman with China's largest oil producer has said. This announcement on Friday came as local newspapers in Canada reported that a senior executive of CNPC said at a conference in Canada that CNPC would pull out from an oil-sands project because of lack of backing from Canadian government and producer. "It is just personal opinion and cannot represent CNPC's standpoint," said an internal person with CNPC. "CNPC will continue to be positive in cooperating with Canadian counterparts in oil-sands development," the spokesman said without commenting on the reported oil sands project. CNPC has acquired 11 oil-sands leases auctioned by the provincial government of Alberta early this year, according to the company.